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Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) will release its quarterly report on Thursday, and it looks like the company might finally get itself into the black for the quarter. Yet even if Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) earnings are positive, it doesn’t guarantee that the stock will do any better than the terrible performance it has seen in recent months.

For years, the promise of obesity-fighting drugs led companies like Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) to search for solutions to the growing epidemic both in the U.S. and around the world. Yet as it turned out, the floodgates for obesity drugs opened all at the same time, with Arena’s Belviq being just one of a set of rival drugs all chasing after the same market. Let’s take an early look at what’s been happening with Arena Pharmaceuticals over the past quarter and what we’re likely to see in its quarterly report.

Stats on Arena Pharmaceuticals

Analyst EPS Estimate

$0.15

Year-Ago EPS

($0.12)

Revenue Estimate

$56.92 million

Change From Year-Ago Revenue

159%

Earnings Beats in Past 4 Quarters

1

Source: Yahoo! Finance.

Why aren’t shareholders excited about Arena earnings?Analysts have had mixed views on Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) earnings in recent months, reversing early calls for a quarterly loss to the current profit expectations, but actually widening their full-year 2013 and 2014 estimates by a nickel per share each. The stock has performed abysmally lately, with declines of almost 20% since late April.

After long delays, the big news for Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) is that Belviq hit the U.S. market in early June, giving patients a second option to go with VIVUS, Inc. (NASDAQ:VVUS) drug Qsymia. Belviq offers more modest weight loss than Qsymia, with a 3.3% drop in weight under Belviq after one year compared to 8.6% to 9.4% for Qsymia. Yet the VIVUS, Inc. (NASDAQ:VVUS) drug comes with some additional risks, giving Arena’s drug a potential competitive advantage for those who don’t need to lose huge amounts of weight. Moreover, with Qsymia having paved the way, Belviq has gotten approval from insurance companies faster, giving it a better competitive position.

Yet, not all of Arena’s news was good this quarter. In May, the company withdrew its application for approval for Belviq from the European Medicines Agency, as it looked unlikely that the EMA would approve the drug. Qsymia was also rejected, potentially leaving Orexigen Therapeutics, Inc. (NASDAQ:OREX)‘s Contrave, which hasn’t gotten FDA approval, as a first-mover in Europe.

Moreover, Arena Pharmaceuticals, Inc. (NASDAQ:ARNA) has some other competition coming up. Novo Nordisk A/S (ADR) (NYSE:NVO) expects to submit diabetes drug Victoza as a weight loss treatment. With a trial producing a 5.2% placebo-adjusted decline in weight, Victoza falls in the middle of the range of competing drugs. Yet Victoza has the negative of having to be injected weekly rather than being a daily pill.

In the Arena earnings report, watch closely to see how the company pitches the early sales pace for Belviq sales. With so much riding on the potential blockbuster drug, Arena needs to demonstrate early success in order to make investors happy. Without that, the stock could continue to falter after the earnings report and well into the future.